Question

Evaluate the major outcomes of the Indian model of mixed economy.

Answer 1

India did not accept the two known paths of development—capitalist model of development in which development was left entirely to the private sector and the socialist model in which private property was abolished and all the production was controlled by the state. Elements from both these models were taken and mixed in India resulting in its mixed economy. In this economy, much of the agriculture, trade and industry were left in private hands, while the state controlled key heavy industries, provided industrial infrastructure, regulated trade and made some crucial interventions in agriculture.

Major Outcomes of the Indian Model of Mixed Economy

Foundations:- The largest developmental projects in India’s history were undertaken such as mega-dams (e.g. Bhakra Nangal and Hirakud) for irrigation and power generation. Some heavy industries were also started such as steel plants, oil refineries, manufacturing units and defence production. Such projects may not have been possible if not for the public sector.

Land Reforms:- In this sector, the mixed economy helped in the abolishment of the colonial system of zamindari. This helped in releasing excess land from the clutches of landlords and reduced the capacity of the landlord to dominate politics. Bringing small pieces of land together in one place so that the farm size could become viable for agriculture was also fairly successful.

Green Revolution:- The government adopted new strategy to ensure food sufficiency. It also offered high-yielding variety seeds, fertilisers, pesticides and better irrigation at highly subsidised prices. The government gave a guarantee to buy the produce of the farmers at a given price. This was the beginning of what was called the ‘Green Revolution’. It also helped in the rise of middle peasant sections.